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Weld County schools use oil, gas leases to tap into revenue streams

Aims Community College in Greeley has leased drilling rights on 6 acres of its campus to Synergy Resources Corp. and gets $13,000 a month in return. (RJ Sangosti, The Denver Post)

Financially strapped college campuses and public schools in Weld County are tapping into the rich revenue stream flowing from the area's oil and gas drilling boom.

"It's absolutely been part of our strategy. It's another revenue source that will help keep us solvent," said Aims Community College president Marsi Liddell. The college leased drilling rights on six acres of its Greeley campus to Synergy Resources last year and gets a $13,000 monthly check in return.

Liddell said it's the kind of outside-the-box thinking that helps provide a safety net in the face of dramatic decreases in college funding from the state.

The University of Northern Colorado and Weld County School District 6 in Greeley also have inked deals with energy companies.

UNC, which has about 12,500 undergraduate and graduate students mostly at its Greeley campus, signed a five-year contract with Mineral Resources Inc. that paid $123,110 for the lease rights, with 16 percent royalties when production begins in 2014.

District 6 so far this year has received about $140,000 from its leases with Synergy.

"We have them on almost all our properties," said Theresa Myers, the district's director of communications. "We're talking 31 schools and four other facilities ... even our bus depot has a lease."

She said virtually all of Greeley is under some sort of contract or has leased with one oil and gas concern or another.

Weld County boom

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Craig Rasmuson, Synergy's vice president of operations, said the company also is in the process of closing a contract with the nearby Eaton school district.

"Anyone out that way is going to be a target," he said.

The use of horizontal drilling and hydraulic fracking to extract oil and gas from shale formations has created a boom in many areas across the country from Pennsylvania to Texas. When it comes to Colorado, Weld County is the hotbed — and much of the resource involves private property.

Selling mineral rights is no different than other public-private partnerships, such as the Marriott hotel on the Metropolitan State University of Denver campus or the University of Colorado Denver's J.P. Morgan Center for Commodities, as far as the colleges are concerned.

"We've all been forced to be more entrepreneurial in our operations," said UNC president Kay Norton. "We're all maximizing revenues. Certainly, I wouldn't say what we're doing is more extreme than anyone else."

But Norton acknowledges that fracking has raised concerns, environmentally, as well as socially, whenever it's been introduced.

"Oil and gas raises a lot of emotions, and there's understandably a fear of the unknown," she said. "But the company we hired is owned by Greeley residents — they literally live here and so they share the same concerns the rest of us have."

Norton grew up in Oklahoma where oil wells can be spotted in close proximity to the state capitol in Oklahoma City. Because of that, she said she insisted that none of the drilling- pad sites, with their multiple wellheads, be constructed on the campus.

"I didn't want any facilities rising up next to the football stadium," she said.

The UNC contract covers almost 250 acres of leased land, including the school's west, central and east campuses. Mineral Resources has a pair of existing pad sites off campus that will be able to access the minerals under the campus through horizontal drilling

Faculty not consulted

Some members of the UNC faculty admit that selling mineral rights and signing leases may have been inevitable. The problem they have is that much of the university community didn't hear about the contract with Mineral Resources until February, more than a year after the contract was signed.

Mary Schuttler, a UNC theater professor and the chair of the faculty senate, said in an e-mail the group hasn't taken an official position on the university's decision to enter into the contract. Charles Charbonneau, UNC's student body president, said that group wasn't consulted.

When Aims entered into its process, it had oil and gas companies come in and give presentations, to try to allay concerns from the university community. Before the contracts were signed, the schools obtained releases from residents who lived in close proximity to the wells.

Myers, of the District 6 school district, said she's signed a lease with a company for exploration on the land beneath her Greeley home. The biggest concerns around town "are whether or not the people are getting a fair deal," she said.

Neither of the colleges expect the oil and gas windfall to replace the cutbacks in state funding.

Norton hopes the leases will bring in more than $10 million to UNC over the next 20 years. And while that sum can't be dismissed as pocket change, Norton points out that UNC is getting almost $32 million in funding from the state Legislature this year.

Should that (state) money go away, she said, "It will leave us even more at the margins. The unhappy truth is that there won't be any rescue from oil and gas."

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